In what we are sure will be a BLS job creating moment, Fannie Mae and Freddie Mac will create a common platform for issuing MBS as they wind down operations and plan for a future in which the two companies no longer exist. Big is about to get bigger as Bloomberg reports, these two GOEs will start sharing risk with private financiers in the single-family loan market. FHFA head Ed DeMarco comments that they are beginning to move to a "post-conservatorship world," though we assume still as explicitly and implicitly guaranteed by the good taxpaying public of America. The merger and creation of a joint securitization company with the goal of executing $30bn each in transactions partnered with the private sector will attempt to reduce that taxpayer load and "ease the transition from where we are today to wherever lawmakers decide the country ought to ultimately go."
- Must defend against Chinese colonial expansion and get the Nigerian oil: U. S. Boosts War Role in Africa (WSJ)
- BOJ nominee Kuroda sets out aggressive policy ideas (Reuters)
- China becomes world’s top oil importer (FT)
- Baby Cured of HIV for the First Time, Researchers Say (WSJ)
- Obama to nominate Walmart's Burwell as White House budget chief (Reuters)
- Wal-Mart Anxious to Combat Amazon’s Lead in Web Vendors (BBG)
- Nasdaq executing trades at a loss (FT)
- Spending cut debate casts pall over Obama's second-term agenda (Reuters)
- Russell Indexes to Reclassify Greece as Emerging Market (BBG)
- Bond Bears Collide With Swaps Showing Low Rates (BBG)
- Buffett Deputies Leaving Billionaire in the Dust Get More Funds (BBG)
- Brazil's leftist president fights to win back business (Reuters)
- U.S. Special Forces train Syrian Rebels in Jordan (Le Figaro)
- Carlos Slim Risks Losing World’s Richest Person Title as Troubles Mount (BBG)
If we can't even cut federal spending by 2.4 percent without much of the country throwing an absolute hissy fit, then what hope does America have? All of this whining and crying about the sequester is absolutely disgraceful. The truth is that even if the sequester goes into effect, the U.S. government will still take in more money than ever before in 2013 and it will still spend more money than ever before in 2013. So it is a bit disingenuous to call what is about to happen "a spending cut", but for the sake of argument let's concede that point. If this is how bad things are now, how bad will they be when a day of reckoning for our economy arrives? And a day of reckoning is coming. Our politicians can try to keep kicking the can down the road for as long as they can, but eventually time will run out. We can borrow our way to prosperity for a while, but in the end there is always a very bitter price to pay for doing so. I would love to tell you that there is a chance that all of this will be turned around, but the truth is that all of this whining and crying about the sequester shows that America is doomed.
The U.S. health care system is a giant money making scam that is designed to drain as much money as possible out of all of us before we die. In the United States today, the health care industry is completely dominated by government bureaucrats, health insurance companies and pharmaceutical corporations. At this point, our health care system is a complete and total disaster. Health care costs continue to go up rapidly, the level of care that we are receiving continues to go down, and every move that our politicians make just seems to make all of our health care problems even worse. At the same time, hospital administrators, pharmaceutical corporations and health insurance company executives are absolutely swimming in huge mountains of cash. Unfortunately, this gigantic money making scam has become so large that it threatens to collapse both the U.S. health care system and the entire U.S. economy.
Is the U.S. economy about to experience a major downturn? Unfortunately, there are a whole bunch of signs that economic activity in the United States is really slowing down right now. In many ways, what we are going through right now feels very similar to 2008 before the crash happened. Back then the warning signs of economic trouble were very obvious, but our politicians and the mainstream media insisted that everything was just fine, and the stock market was very much detached from reality. When the stock market did finally catch up with reality, it happened very, very rapidly. Sadly, most people do not appear to have learned any lessons from the crisis of 2008. Americans continue to rack up staggering amounts of debt, and Wall Street is more reckless than ever. As a society, we seem to have concluded that 2008 was just a temporary malfunction rather than an indication that our entire system was fundamentally flawed. In the end, we will pay a great price for our overconfidence and our recklessness.
Back in December 2011, a US RQ-170 Sentinel drone was either brought down or crash landed smack in the middle of Iran, allowing the local military and scientists to reverse engineer it furthering their own understanding of possible countermeasures, as well as selling the underlying technology to China and other countries eager to peek inside America's remote-controlled "oppression liberators." All this happened because someone during the drone design phase forgot to add a self-destruct option. Now, over a year later, we will see if someone finally thought of adding this simple feature following news that Iran has just brought down another (just modestly antagonizing) foreign spy drone over its territory.
ViaMat, a Swiss logistics company that has been safeguarding precious metals since 1945, is literally the gold standard in secure storage. They have vaults from Switzerland to Hong Kong to Dubai, and they count among their clients some of the largest mining companies in the world. They know what they’re doing. And now they’re dumping US citizens.... due to US tax structure changes. If history is any guide, storing gold abroad is critical.
As we speculated from the very beginning, and as was reaffirmed in "Is Nigeria, And Its Light Sweet Crude, About To Be Drawn Into The Mali "Liberation" Campaign?", the "French" (with complete and fully-comped US support) Mali campaign is slowly but surely migrating to its intended target: Nigeria, and rather its holdings of light sweet crude. And while the US presence in this latest resource land grab, this time in Africa, was so far rather stealthy, it appears the time for foreplay is over and moments ago Obama told congress has has dispatched 40 more American troops to Niger this week, bringing the total U.S. military presence in the west African country to 100. Let's hear it for the full retroactive transparency demanded by the War Powers Resolution.
- Spain’s Deficit Widened to 10.2% on Bank-Rescue Cost (BBG) - or as Rajoy would say, when one excludes all negatives, it was a surplus
- Monti Austerity Pushes Italians Toward Parliament Upheaval (BBG)
- Russia accuses U.S. of double standards over Syria (Reuters)
- Euro Area to Shrink in 2013 as Unemployment Rises (BBG)
- UK, China central banks to discuss currency swap line (Reuters)
- Italy Court Rejects Challenge to Bailout of Monte Paschi (BBG)
- Japan's Abe to showcase alliance, get Obama to back Abenomics (Reuters)
- Russia’s missing billions revealed (FT)
- China Home-Price Gains May Presage Policy Tightening (BBG)
- Fed unlikely to curtail stimulus despite rising doubts (Reuters)
- Banks face fines up to 30 per cent of revenues (FT) - just as soon as Basel III is passed (i.e., never)
- J.C. Penney Can Raise Billions Under Revised Credit Line (BBG)
- Cost of Dropping Citizenship Keeps U.S. Earners From Exit (BBG)
We suspect that if one combines all the most apocalyptic scenes from 'Day After Tomorrow', 'Armageddon', 'Planet of the Apes', and '2012', then President Obama's address (scheduled for 1045ET) on the impact of the sequester will come close. Of course, he could merely comment on the fact that we need to cut spending (not slow spending growth) in order to revert to sustainability but we suspect this is not 'silver linings playbook'. Young children and pets should probably be removed from the room as our leader explains just how cataclysmic things are going to get unless we all just get along... As a gentle reminder, here is the very same President threatening to veto any effort to stop spending cuts - oh well, it seems there really are no easy off-ramps.
Throughout history, citizen disarmament generally leads to one of two inevitable outcomes: Government tyranny and genocide, or, revolution and civil war. Anti-gun statists would, of course, argue that countries like the UK and Australia have not suffered such a result. My response would be – just give them time. You may believe that gun control efforts are part and parcel of a totalitarian agenda (as they usually are), or, you may believe that gun registration and confiscation are a natural extension of the government’s concern for our “safety and well-being”. Either way, the temptation of power that comes after a populace is made defenseless is almost always too great for any political entity to dismiss. One way or another, for one reason or another, they WILL take advantage of the fact that the people have no leverage to determine their own cultural future beyond a twisted system of law and governance which is, in the end, easily corrupted. The unawake and the unaware among us will also argue that revolution or extreme dissent against the establishment is not practical or necessary, because the government “is made of regular people like us, who can be elected or removed at any time”. This is the way a Republic is supposed to function, yes. However, the system we have today has strayed far from the methods of a Free Republic and towards the machinations of a single party system. Our government does NOT represent the common American anymore. It has become a centralized and Sovietized monstrosity. A seething hydra with two poisonous heads; one Democrat in name, one Republican in name. Both heads feed the same bottomless stomach; the predatory and cannibalistic pit of socialized oligarchy.
- Obama Paints Wider Role for Government in Middle Class Revival (BBG)
- Obama to Seek a New Trade Deal With EU (WSJ)... or this is strawman why 2016 GDP will be higher
- Mobile phone sales fall for the first time since 2009 (Telegraph)
- Sequester Looms, No Deal in Sight (WSJ)
- Neither US party swallows a compromise (FT)
- Embattled Economies Cling to Euro (WSJ)
- For China, Spending Is Harder Than It Looks (WSJ)
- Bank of England's Sir Mervyn King says recovery in sight (BBC) - just a little more inflation first
- G7 fails to defuse currency tensions (FT)
- Japanese Leader Urges Firms to Boost Wages (WSJ) - so does the US one
- Fed Bank Chiefs Back Money-Fund Overhaul (WSJ), or force everyone out of MMFs and into stocks
Over the past couple of hundred years, the State of the Union has been enjoyed by pamphlet, radio, TV, and webcast and each and every year, the citizenry has sat avidly awaiting their 'word' to come up on SOTU Bingo or for the bets they made on the average length to be confirmed. As WaPo notes, the average minutes spent on the address has grown from a mere 36:53 under President Jimmy Carter up to 1 hour and 5 minutes under the current president. From comparisons of various word frequencies (e.g. tax vs cut or job vs hope) to the ultimate SOTU Drinking Game, and from an 51/53 minute over/under to the color of Obama's tie, below is everything you need to know about SOTU but were absolutely embarrassed to ask...
The economic collapse is not a single event. The economic collapse has been happening, it is is happening right now, and it will continue to happen. Yes, there will be times when our decline will be punctuated by moments of great crisis, but that will be the exception rather than the rule. A lot of people that write about "the economic collapse" hype it up as if it will be some huge "event" that will happen very rapidly and then once it is all over we will rebuild. Unfortunately, that is not how the real world works. We are living in the greatest debt bubble in the history of the world, and once it completely bursts there will be no going back to how things were before. But other than that, everything is rainbows and lollipops, right?
- Pope steps down, citing frailty (Reuters)
- Japan’s economic minister wants Nikkei to surge 17% to 13,000 by March (Japan Times)
- Venezuelan devaluation sparks panic (FT)
- Rajoy releases tax returns, but fails to clear up doubts over Aznar years (El Pais)
- Companies Fret Over Uncertain Outlook (WSJ)
- Home Depot Dumps BlackBerry for iPhone (ATD)
- Kuroda favors Abe's inflation target, mum about BOJ role (Kyodo)
- A Cliff Congress May Go Over (WSJ)
- U.S., Europe Seek to Cool Currency Jitters (WSJ)
- Radical rescue proposed for Cyprus (FT)
- Franc Is Still Overvalued, SNB’s Zurbruegg Tells Aargauer (BBG)
- Northeast Crawls Back to Life After Crippling Blizzard (WSJ)